USOil Retreats from Overbought Levels and its 2023 High
USOIL Analysis
USOil runs its fourth straight profitable month, helped by supply curbs from Saudi Arabia and Russia and shrinking inventories, with yesterday's API report showing a draw of more than 5 million barrels. Furthermore, the recent data from China - the world's largest consumer of oil - offered some hope after a series of disappointing releases, since industrial production and retail sales strengthened in August. The International Energy Agency (IEA) reiterated its forecast for global to demand to increase by 2.2 million barrels/day in 2023, led partly by "resurgent Chinese consumption". [1]
However, China's post pandemic recovery is in the doldrums, with subdued factory activity, suppressed consumer demand and low trade activity. At the same time the US Fed has kept the door open to more tightening and today's policy decision could affect oil prices.
On the technical front, USOil reached the most overbought conditions since the 2022 multi-year highs, as shown by the Relative Strength Index (RSI) on the Daily chart and slides today.
This creates risk for further pressure towards the EMA200 (84.50-60) on the H4 chart, but new catalyst would likely be require for a breach. Daily closes below it could halt the bullish bias, but that does not look very easy under current conditions. Above the 38.2% Fibonacci the decline is viewed as a limited correction that can eventually help USOil to new 2023 highs (93.76), but we are cautious at this stage for further gains past the descending trend line from last year's highs (at around 97.40).
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 12 Apr 2026 https://www.iea.org/reports/oil-market-report-september-2023 |
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